Insurers following ‘the playbook’ in opposing California ballot initiative

Introduction

LOS ANGELES — As I wrote in my book, Deadly Spin, the health insurance industry and other special interest groups use a tried-and-true set of tactics to push back against threats to their profitability. I referred to those tactics collectively as “The Playbook on How to Influence Lawmakers and Regulators Through the Manipulation of Public Opinion.”

Seeing what is playing out in California this year, I should have included voters, along with lawmakers and regulators, as among those subject to influence.

Health care reform advocates in California, led by Consumer Watchdog, are supporting a November ballot initiative to give the state insurance department authority to reject proposed rate increases that are deemed to be excessive.

According to the Kaiser Family Foundation, about 35 states have given their insurance departments the legal power of prior approval — or disapproval — of proposed health insurance rate changes.

California is not among them, and advocates believe the state’s residents are paying more for their health insurance coverage than necessary. While the Golden State did establish a rate review process in 2011 requiring public disclosure of proposed rate hikes — which the California Public Interest Research Group says has saved residents almost $350 million — lawmakers would not go further and grant the insurance commissioner authority to say “no” to rate hikes. As a result, says CalPIRG, about a million Californians paid higher premiums due to rate hikes state state officials deemed “unreasonable” but couldn’t do anything about.

So you can be certain that California residents are making significant contributions to the big national health insurers’ profitability. And the insurers are spending millions of dollars — and making good use of the The Playbook — to persuade voters that allowing the insurance commissioner to reject unreasonable rate increases would not be in their best interests.

The Los Angeles Times reported last week that health insurers — led by WellPoint, which owns and operates the state’s eight-million member Anthem Blue Cross company — have so far contributed $25.4 million to an industry campaign aimed at defeating the rate regulation initiative. WellPoint contributed $12.8 million itself, and has been joined by other insurers, including UnitedHealthcare, Kaiser Permanente, Blue Shield and Health Net.

Published reports show that they have been spending that money almost exactly as prescribed by The Playbook. Here are the highlights:

• “Hire a big and well-connected PR firm … ”

The health insurers have hired at least two firms to craft and disseminate their messaging. Reporters have noted in stories that when they’ve called the health insurers to ask about their campaign, they’ve been referred to Robin Swanson, who served as communications director for California State Assembly Speaker John Perez before hanging out her Swanson Communications shingle.

They also apparently have retained Sacramento-based Redwood Pacific Public Affairs, whose clients include WellPoint. The firm is headed by Rick Claussen, who is also a partner in the Washington-based firm of Goddard Claussen Public Affairs. I know their work from my early years in the insurance industry. It was Goddard Claussen that developed the “Harry and Louise” commercials for health insurers, which are largely credited with turning public opinion against the Clinton health care reform proposal in 1994.

• “Set up and operate a coalition or front group…You can launder your money through your PR firm so that no one has to know you have any association with the front group.”

Health insurers named their front group to fight the ballot initiative “Californians Against Higher Health Care Costs.” And sure enough, it’s operated out of the office of one of its PR firms. On its website, Californians Against Higher Health Care Costs provides its address at 1215 K Street, Suite 2260, in Sacramento, which just happens to be Redwood Pacific’s address.

• “Recruit third parties to list as members of your front group.”

Californians Against Higher Health Costs, despite being funded largely by insurers, claims to be “a coalition of doctors, hospitals, health insurers, and California employers.”

• “Conduct a bogus survey or slice or dice data with the intent of misleading…”

Last week Californians Against Higher Health Care Costs released a study it paid $50,000 to produce that contends the proposed ballot initiative “would disrupt the most comprehensive health reform undertaken since the enactment of Medicare and Medicaid, almost a half-century ago.” In other words, it might “undercut” Obamacare.

In response, California Insurance Commissioner Dave Jones told the Los Angeles Times that the report, written by a former insurance company executive who later served as the director of the Massachusetts health insurance exchange during the Romney administration, was flawed and intentionally misleading.

“This consultant’s report has been bought by health insurers who are dead set against any public scrutiny that could rein in excessive rate increases,” he said.

I’ll be keeping an eye on the campaign for and against giving Jones more authority in the weeks and months ahead. Stay tuned.